House of Lords Library

Measuring Full Employment

Published Thursday, October 15, 2015

This In Focus note examines the concept of full employment and how to measure it, in light of the latest labour market statistics released in mid-October, showing the highest employment rate recorded since comparable records began in 1971.

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The Conservative manifesto for the 2015 general election set out the aim of achieving full employment. Clause 1 of the Welfare Reform and Work Bill, currently in committee stage in the House of Commons, would require the Secretary of State to report annually to Parliament on the progress made towards full employment, although it does not define a particular measure or target. There are a number of ways that full employment could be measured, depending on whether one is focusing on the employment rate or the unemployment rate.

The latest ONS labour market statistics released in mid-October show that for the three-month period June to August 2015, 73.6 percent of people aged from 16 to 64 were in work. This is the highest rate recorded since comparable records began in 1971.

The unemployment rate in the same three-month period was 5.4 percent, the lowest unemployment rate seen since March to May 2008, when a rate of 5.2 percent was recorded.

Lords In Focus LIF-2015-0031

Author: Nicola Newson

Topics: Economic situation, Employment, Unemployment, World economy

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